What % are you willing to sacrifice to maintain a position?

Discussion in 'Trading' started by Cuddles, Mar 2, 2020.

  1. Sekiyo

    Sekiyo

    Not long ago you were sure about 4800.
    You forgot to mention the error in measurement.

    4800 +- 2000

    Anyone can be sure about a number,
    With infinite error in measurement.
    Anyone but not a risk taker, trader.
     
    #61     Mar 3, 2020
  2. Sekiyo

    Sekiyo

    He does not know that you can go broke even with an edge, advantage.
     
    #62     Mar 3, 2020
    KCalhoun likes this.
  3. ironchef

    ironchef

    That person would still get wiped out, but slowly. It is called death by a thousand cut.
     
    #63     Mar 3, 2020
  4. tiddlywinks

    tiddlywinks

    You are assuming consistent back to back losses.

    With 100K, risking 1% or less, with a system/method having appropriate positive expectancy and reward, its somewhat difficult to wipe out... running in place is more of a possibility with average discipline and minimal mechanical skills using this level of risk management and system.
     
    #64     Mar 3, 2020
    KCalhoun and murray t turtle like this.
  5. smallfil

    smallfil

    I was referring to someone claiming he had a 100% win rate. Bernie Madoff claimed that. What you do with your monies is your business. Never suggested you were defrauding anyone. Was only challenging your claim of being able to predict what is going to happen next 100% of the time. Even the big banks and brokers have only an 85-90% win rate. So, 10-15% of the time they lose. Everyone is going to lose sometime is my only point.
     
    #65     Mar 3, 2020
    SimpleMeLike likes this.
  6. smallfil

    smallfil

    Of course, it will. Being human, you will make trading mistakes. That is a given. Here is how risk management works. I risk no more than 2% per trade. Limit my open positions to just 5 trades at any time. That puts 10% of my monies at risk on a worst case scenario. If I lose all 5 trades, I lose 10% of my monies maximum. At lot of times, my stop loss closes my trade at 1% or even less of a loss. Other times I have a small winner. Now, what is my upside? My upside is unlimited. Since, I trade options (I buy them), I have leverage added. Now, leverage cuts both ways. However, since, my worst case scenario is already covered, I just have to pick trades that gives me a huge potential return of 3, 4 or 5 times my monies. Now, not all price targets will get hit and I will get less of a return on some trades and greater returns on other winning trades. It does not matter because each trade is weighted equally.
     
    #66     Mar 3, 2020
    KCalhoun likes this.

  7. nooby always wins

    waiting for a single live trade that cashes
     
    #67     Mar 3, 2020
    murray t turtle likes this.
  8. %%
    7or 8%, to make 24% is a good rule for stocks.[ IBD idea/position trade] I had more/slippage/loss that that on SOXS, early JAN/swing/position trade. 7% on LEVI, which turned out much better than 8%/short term trade. 5% some time ago on SQQQ+ can not hold those inverse like a long ETFs. I do less short term trading, 'cause have to use tighter stops/smaller time frame; but short/days term trading=good diversification in time.............................................................
    And I don't worry about drawdowns on QQQ....; 'cause its not going to zero like DAL, GM LEH,did.[I label something a trade or investment. ,most of my ETFs investments did better than trading except DEC 2019 + JAN.........................................................................................]
     
    #68     Mar 3, 2020
    Cuddles likes this.